Key Takeaways

1. Establishing a Joint Stock Company (JSC) in Vietnam involves pre-incorporation, incorporation, and post-incorporation steps.
2. The pre-incorporation steps include choosing a unique company name, preparing the company charter, and obtaining approval from the competent authority.
3. By following a step-by-step guide and seeking guidance from legal and business professionals, entrepreneurs and investors can establish a strong legal and financial foundation for their JSC in Vietnam.

Vietnam’s dynamic economy, stable political environment, and strategic location in Southeast Asia make it an attractive destination for foreign investors looking to establish a business presence in the region.

One of the most popular forms of business entities in Vietnam is the Joint Stock Company (JSC).

A JSC is a type of corporate entity that is owned by its shareholders and has a separate legal personality from its owners.

Forming a JSC in Vietnam can be a complex process, but it offers numerous advantages such as limited liability protection, easier access to funding, and greater potential for growth.

However, navigating the legal and regulatory landscape in Vietnam can be challenging, especially for foreign investors who are unfamiliar with the country’s laws and customs.

This step-by-step guide will provide a comprehensive overview of the process of forming a JSC in Vietnam.

From the pre-incorporation steps of choosing a company name and preparing the company charter to the post-incorporation steps of registering for tax and opening a bank account, this guide will cover everything you need to know to successfully form a JSC in Vietnam.

Whether you are a foreign investor looking to establish a business in Vietnam or a local entrepreneur looking to expand your operations, this guide will provide you with the knowledge and insights you need to navigate the complex process of forming a JSC in Vietnam.

By following the step-by-step instructions provided in this guide, you can ensure that your JSC is formed in compliance with Vietnamese law and is well-positioned for success in the vibrant Vietnamese business landscape.

Before we venture further into this article, we like to share who we are and what we do.

About 9cv9

9cv9 is a business tech startup based in Singapore and Vietnam with a strong presence all over the world.

With over six years of startup and business experience, and being highly involved in connecting with thousands of companies and startups, the 9cv9 team has listed some important learning points in this overview of how to register and start a Joint Stock Company (JSC) in Vietnam.

If your company needs HR, hiring, or corporate services, you can use 9cv9 corporate services. Book a consultation slot here, or send over an email to [email protected].

What is a Joint Stock Company (“JSC”)?

A Joint Stock Company (“JSC”) is a type of business entity in which the ownership is divided into shares.

Shareholders are the owners of the company and they hold shares representing their ownership interest.

Below are some of the features of the JSC.

Limited Liability

The JSC is a legal entity that has its own rights and obligations separate from those of its shareholders.

In a JSC, shareholders have limited liability, which means that they are not personally liable for the debts or obligations of the company beyond the amount of their investment.

This makes the JSC a popular choice for entrepreneurs and investors who want to limit their personal liability while raising capital from multiple sources.

Equal Value Shares and Shareholders

In a joint-stock company, the charter capital is divided into equal-value units known as shares, and the total face value of the shares sold represents the company’s charter capital.

The registered charter capital of a joint-stock company is determined by the total face value of the subscribed shares, which must be stated in the company’s charter.

There is no legal restriction on the maximum equity percentage that each member can purchase, but the members can mutually agree to impose a limit on the maximum number of shares that any member can buy, as specified in the charter.

There must be at least three shareholders in a JSC.

Regarding the maximum number of stockholders, there are no restrictions.

One of the key advantages of forming a Joint Stock Company (JSC) in Vietnam is the flexibility it offers with regard to the nationality of its shareholders.

Unlike some other types of businesses, JSCs allow for shareholders of any nationality, making it a popular choice for foreign investors looking to establish a presence in Vietnam.

Depending on the goals and resources of the business, foreign-invested JSCs can be structured in a variety of ways. For example, they can be solely owned by foreigners, or they can be joint ventures between foreigners and locals. This flexibility allows businesses to tailor their ownership structure to their specific needs and goals.

Ability to issue shares

Another key advantage of JSCs in Vietnam is their ability to issue shares and list them on the stock exchange publicly.

This enables businesses to easily mobilize capital, sell shares, and raise funds for growth and expansion.

In contrast, Limited Liability Companies (LLCs) in Vietnam do not have this option, making JSCs a more attractive option for businesses looking to raise capital.

The management of a JSC is carried out by the Board of Directors, who are elected by the shareholders.

The Board of Directors is responsible for making strategic decisions and overseeing the operations of the company.

Shareholders also have the right to vote on important matters affecting the company, such as changes to the charter or the election of the Board of Directors.

JSCs are regulated by the Vietnamese Law on Enterprises, which sets out the legal framework for their establishment, operation, and dissolution.

They are subject to various legal and regulatory requirements, including registration with the Business Registration Office, compliance with tax and labor laws, and annual reporting and disclosure requirements.

JSCs are a popular choice for businesses operating in Vietnam due to their flexible ownership structure, limited liability for shareholders, and access to capital markets.

They are commonly used for businesses engaged in manufacturing, trade, and services.

How to Form a Joint Stock Company in Vietnam: A Step-by-Step Guide (Updated in 2023)

1. Documents Required To Register a JSC
2. Pre-Incorporation Steps
3. Incorporation Steps
4. Post-Incorporation Steps

1. Documents Required To Register a JSC

Although Joint Stock Companies (JSCs) are a popular choice for medium and large projects in Vietnam, the process of establishing one can be quite complex and time-consuming.

This is due to the more stringent requirements and documentation needed compared to other business entities.

To set up a JSC in Vietnam, various documents must be prepared and submitted according to the Law on Enterprises 2020:

A) The Enterprise Registration Application Form

All these information have to be provided in this ERC application:

• Enterprise’s name
• Enterprise’s headquarters, phone number, fax number, and email address (if any)
• Enterprise’s business lines
• Charter capital (or investment capital if the enterprise is a sole proprietorship)
• Types of shares, the Face value of each type, and total authorized shares of each type if the enterprise is a joint stock company
• Tax registration information
• The expected quantity of employees
• Full name, signature, mailing address, nationality, and legal documents of the legal representative

B) Company’s Charter (Important)

A joint-stock company must have charter capital upon its establishment.

In the company’s charter, this information will be required.

• The company’s name, addresses of the headquarters, branches, and representative offices (if any)
• The company’s business lines
• The charter capital; the total quantity of shares, types of shares, and the face value of each type (for joint stock companies);
• Full name, mailing address, nationality of the owner, and the founding shareholders. Quantity of shares, types of shares, and value of each type held by founding shareholders.
• Rights and obligations of the members or shareholders
• The organizational structure
• Quantity, titles, rights, and obligations of each of the enterprise’s legal representatives;
• Method for ratifying the company’s decisions; rules for settlement of internal disputes;
• Basis and method for determination of salaries and bonuses of the executives and controllers;
• Cases in which members/shareholders may request the company to repurchase their stakes/shares
• Rules for distribution of post-tax profits and settlement of business losses;
• Cases of dissolution; procedures for dissolution and liquidation of the company’s assets;
• Procedures for revising the company’s charter.

The initial company’s charter shall contain the full names and signatures of the founding shareholders that are individuals and legal representatives or authorized representatives of founding shareholders that are organizations.

C) List of founding shareholders and the list of shareholders that are foreign investors

The list of founding shareholders and foreign shareholders of a joint stock company shall contain:

• Full names, signatures, nationalities, and mailing addresses of founding shareholders and foreign shareholders that are individuals
• Names, EID numbers, and addresses of headquarters of founding shareholders and foreign shareholders that are organizations; 
• Full names, signatures, nationalities, mailing addresses, or legal representatives or authorized representatives of founding shareholders and foreign shareholders that are organizations; 
• Stakes and values thereof, holdings, types, quantities, and values of assets contributed as capital, capital contribution time of each member; types and amounts of shares, holdings, types, quantities, and values of assets contributed as capital, capital contribution period of each founding shareholder and foreign shareholder.

D) Appointing a Supervisory Board

During the establishment period, the executive board appointed by the Board of Supervisors plays a vital role in managing the affairs of the company.

One of their primary responsibilities is to collect capital contributions from members and complete all the necessary paperwork for the company’s registration. This ensures a smooth and efficient transition from the establishment period to the company’s official operation.

E) Subscribe to the commercial directory

After subscribing to the commercial directory, the court conducts a thorough due diligence process before listing the company’s name on the business directory and announcing its establishment.

Once this step is complete, the company obtains legal status, allowing it to issue shares to the public, but only after it has been registered.

F) Other Documents needed

Copies of:

a) Legal documents of founding shareholders and shareholders that are foreign investors who are individuals and legal representatives;

b) Legal documents of shareholders that are organizations, documents about the designation of authorized representatives; legal documents of authorized representatives of founding shareholders and shareholders that are foreign organizations.

Legalized copies of legal documents of the members that are foreign organizations.

c) The Certificate of Investment Registration of foreign investors as prescribed by the Law on Investment.

2. Pre-Incorporation Steps

A) Choose a Company Name

The first step in forming a JSC in Vietnam is to choose a unique company name.

The name must not be identical or similar to any existing company name in Vietnam.

The company name should also comply with the Vietnamese language requirements, and not contain any prohibited terms.

In accordance with Vietnamese law, a Joint Stock Company (JSC) must have a Vietnamese name that consists of two parts: the company type, which should be written as “công ty cổ phần” or abbreviated as “công ty CP,” and a proper name that uses the Vietnamese alphabet, numbers, symbols, and letters F, J, Z, and W.

The company name should not be identical or similar to existing names, overlap with state agency or social organization names without their consent, or use symbols or words that conflict with Vietnamese culture and customs.

Moreover, if a JSC has a foreign name in Vietnam, it must comply with the provisions of Article 40 of the Law on Enterprises 2014 (or Article 39 of the Law on Enterprises 2020).

It is important to adhere to these regulations to ensure compliance with Vietnamese law and avoid any legal issues in the future.

B) Prepare the Company Charter and Obtain Approval from the Competent Authority

The company charter is a legal document that outlines the rights and obligations of shareholders, the management structure of the company, and other important details such as the company’s objectives, capital structure, and dividend policy.

The charter must be approved by the competent authority, which is usually the Department of Planning and Investment in the province where the company is registered.

C) Obtain a Business Registration Certificate

The next step is to obtain a business registration certificate from the Department of Planning and Investment.

The certificate confirms that the company is registered and authorized to conduct business in Vietnam.

To obtain the certificate, the company must provide various documents, including the company charter, the identification documents of the shareholders and legal representatives, and proof of the legal right to use the registered address.

3. Incorporation Steps

Here are the Incorporation Steps for forming a Joint Stock Company (JSC) in Vietnam:

1. Prepare the Company’s Charter Documents: Once the company name is approved, the founders must prepare the charter documents, which include the charter, the incorporation meeting minutes, the list of founding shareholders, and the documents proving the legal right to use the registered address. The charter documents must be signed and sealed by the founders.
2. Obtain the Seal of the Company: The company seal is a legal requirement in Vietnam and must be obtained before the registration process can be completed. The seal can be made by a company specializing in seal production or by a seal-making department at the local Department of Justice.
3. Complete the Registration Process with the Business Registration Office: The next step is to register the company with the Business Registration Office. Registering a new enterprise in Vietnam can be done through direct application, submission by post, or online registration. Online registration is done through the National Enterprise Registration Portal, where the application has the same legal value as a physical one. Digital signatures and business registration accounts can be used for online registration. The business registration authority will review the application and issue enterprise registration within 3 working days. In case of invalid applications, applicants will be notified and required to provide necessary supplementation, while rejected applications will be explained in writing. Detailed regulations on documentation and procedures will be provided by the Government.
4. Obtain the Enterprise Registration Certificate: Once the registration is complete, the Business Registration Office will issue the enterprise registration certificate, which confirms that the JSC has been officially established and is authorized to conduct business activities in Vietnam.

After completing the above steps, the JSC must also publish its establishment notice in the National Business Registration Portal within 30 days from the date of issuance of the enterprise registration certificate.

This notice must include the company’s name, address, business lines, charter capital, and other relevant information.

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4. Post-Incorporation Steps

Here are the Post-Incorporation Steps for forming a Joint Stock Company (JSC) in Vietnam:

1. Register for Tax: After obtaining the enterprise registration certificate, the JSC must register for tax with the tax authorities in the locality where the company is headquartered. The company must obtain a tax code and register for Value Added Tax (VAT), Corporate Income Tax (CIT), and other applicable taxes.
2. Open a Bank Account: The JSC must open a bank account in Vietnam and deposit the charter capital as stated in the enterprise registration certificate. The founders must provide the bank with the enterprise registration certificate and other relevant documents to open the account.
3. Obtain the Business License: Depending on the nature of the company’s business activities, the JSC may need to obtain a business license from the relevant authorities. For example, companies involved in the production of food and beverages, pharmaceuticals, or medical equipment must obtain a business license from the Ministry of Health.
4. Register with the Social Insurance Agency: The JSC must register with the Social Insurance Agency and contribute to the social insurance fund for its employees. The contribution rate is based on the salary level of each employee and is paid monthly.
5. Comply with Annual Filing Requirements: The JSC must comply with annual filing requirements, which include submitting an annual report and financial statements to the tax authorities and the Business Registration Office. The annual report must be submitted within 90 days from the end of the fiscal year.

By completing these post-incorporation steps, the JSC can ensure that it is compliant with Vietnamese laws and regulations and is well-positioned for success in the Vietnamese business environment.

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Conclusion

Forming a Joint Stock Company (JSC) in Vietnam requires a thorough understanding of the legal and regulatory requirements, as well as a strategic approach to business planning and execution.

By following the step-by-step guide outlined above, potential investors and entrepreneurs can navigate the complex process of forming a JSC in Vietnam with greater confidence and success.

The pre-incorporation steps involve choosing a unique company name, preparing the company charter, and obtaining approval from the competent authority.

The incorporation steps involve preparing the charter documents, obtaining the company seal, completing the registration process with the Business Registration Office, and obtaining the enterprise registration certificate.

Finally, the post-incorporation steps involve registering for tax, opening a bank account, obtaining a business license (if applicable), registering with the Social Insurance Agency, and complying with annual filing requirements.

By completing all of these steps, a JSC can establish a strong legal and financial foundation, comply with all relevant regulations, and position itself for long-term growth and success in the dynamic Vietnamese market.

If you are considering forming a JSC in Vietnam, it is essential to seek the guidance of experienced legal and business professionals who can help you navigate the process and ensure that you are making the right strategic decisions for your company.

With the right planning, support, and execution, your JSC can become a leading player in Vietnam’s vibrant and rapidly growing economy.

If your company needs HR, hiring, or corporate services, you can use 9cv9 corporate services. Book a consultation slot here, or send over an email to [email protected].

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